Thursday, October 22, 2009

Administration to Decide on Housing Tax Credit Soon

Despite pleas from thousands of homebuyers and intense lobbying, the Obama administration and those deciding the fate of the first time homebuyers tax credit are not ready to make a decision just yet. According to MarketWatch.com, Housing and Urban Development Secretary Shaun Donovan said earlier this week that the administration does not have the information they need yet to make the decision, and will not have that information for a few weeks.

"We understand the urgency of this situation," Donovan said at a Senate Banking Committee hearing, according to Congressional Quarterly. "And we believe that within the next few weeks, we will have additional data that will allow us to sit down with you" and discuss whether and how to extend the credit, said Donovan, according to CQ.

Sens. Christopher Dodd, D-Conn., and Johnny Isakson, R-Ga., have proposed extending the $8,000 credit through the end of next June. Created by the economic stimulus package signed by President Barack Obama in February, it's now set to expire on Nov. 30.

"The credit is set to expire in five weeks," said Dodd. "But the work of stabilizing the housing market won't be done. We still need to use every tool at our disposal to try and fix this problem," Dodd said.

The hearing came after the Commerce Department reported that new construction on U.S. housing units was essentially flat in September, at a seasonally adjusted annual rate of 590,000. See full story.

Following 14 straight quarters of declines, many economists expect that residential investment will finally add to U.S. growth in the current quarter, which ended in September.